RHB on CSC Steel

CSC Steel – 2QFY12/09 result to beat our forecast Market Perform (down from OP)
Results Preview- We believe 2QFY12/09 result is likely to come in above our expectation. This is mainly due to higher flat
steel product prices and inventory repleniching activities.
- We believe CSC Steel's performance is likely to remain strong over the next few quarters, underpinned by
favourable flat steel product near-term price outlook. The favourable near term price outlook will in turn
boost inventory replenishing activities, as stockists tend to replenish more aggressively when prices are
expected to trend up.
- We are raising our FY12/09 net profit forecast by 72.2% to RM31.1m, to reflect higher sales volume and
selling prices. No change to our FY12/10-11 net profit forecasts.
- Indicative fair value is RM1.14 based on FY12/10 EPS of 16.3 sen.
- Downgrade from outperform to Market Perform as upside in share price is capped after the run-up recently

17/8/2009